"There was a proposal by NTPC to approach capital market but Finance Ministry has rejected it last week," Minister of State for Power Jairam Ramesh told reporters on the sidelines of a conference on energy.
Power Ministry had approached the department of disinvestment in Ministry of Finance in August 2007 for approval of NTPC's FPO that could fetch the company nearly Rs 6,000 crore to part finance the expansion programme.
After the FPO, government shareholding in NTPC would have come down to 84.75 per cent from the present level of 89.5 per cent.
NTPC, in 2004, had raised Rs 5,386 crore through an Initial Public Offering (IPO) by way of raising the fresh capital and also diluting government's stake.
The power company has set an ambitious target to double its capacity to 50,000 MW by 2012 from 27,904 MW currently for which it plans an investment of Rs 88,000 crore.
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The company also plans to venture into nuclear power manufacturing and power generation in the hydro sector.